WGU C214 Final Exam Questions

WGU C214 Final Exam Questions Coupon Rate The interest rate that a company promises to pay on bonds Market Rate The interest rate on other comparable bonds Par Value The amount payable on maturity of the bond Market rate Same as YTM - Yield to Maturity Gordon Growth Model Assumes stable growth rates and does not incorporate risk CAPM Model Allows to determine expected return on stocks and incorporates risk How do public companies maximize shareholder value? By maximizing Earnings Per Share How do private companies maximize shareholder value? By keeping control within the company Positive credit rating has what effect on capital? Lowers cost of capital What is cash flow from operating activities? It is cash flow generated for sale of products and services What is the formula for retained earnings? Ending retained earnings=Beginning retained earnings + Net Income = Dividends Is depreciation and salvage value on an asset precise or is it an estimate? It is an estimate What is an example of accounting difference? Companies using different accounting methods What is an example of a timing difference? Companies using different fiscal years Do stock holders or bond holders have voting rights? Stock holders